The case for a minimum wage
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The case for a minimum wage
May 5, 2010Mr Lee Kuan Yew says that paying Minimum Wage is undesirable because introducing such a legislation will cut employment (watch video below). This, he concludes, will undermine the competitiveness of an economy. Such a view is simplistic and, unfortunately, not more robustly challenged in the public sphere, thanks to the control of the media.
The Minister Mentor says that “market forces” should determine the wage levels of workers in Singapore. Paying workers $3 and ministers $1,000 for an hour’s work is not “market forces”—it is exploitation at its ugliest.
Paying indecently low wages in high-cost Singapore not only dehumanises our workers, it also creates insecurity in the workforce which works against productivity. A wage structure that is out of kilter with productivity is inimical to long-term growth.
Legislating minimum wage, the lowest amount of wages an employer may legally pay to an employee, will ensure that workers will not be exploited.
Of course, employers and businesspeople instinctively fear a Minimum Wage policy because such legislation would drive wage costs up, cutting into their profit margins. But such a view neglects to take into account that higher wages increase the spending power of workers in general which stimulates consumption and ultimately benefits business.
Minimum wage also increases the productivity as financially secure workers can focus on their jobs instead of being distracted with having to find supplementary income because of low and inadequate wages.
It also reduces poverty and want which can breed mistrust and resentment towards management thereby lowering quality output of work.
At the state level, Minimum Wage decreases the cost of welfare programs by increasing incomes for the lowest-paid. Such legislation is also relatively easy to enforce because the enforcement agencies only need to act on reported cases of wage violations instead of setting up large bodies to monitor a programme.
Most of all Minimum Wage prevents workers from being exploited and allows prosperity to be shared by all.
Today over 90 percent of countries across the world have Minimum Wage in one form or another. The few countries that have no laws or regulations on Minimum Wage are Bahrain, Qatar, UAE, Tonga, Brunei, Somalia, and, of course, Singapore.
Even Hong Kong is doing something about its income inequality. A minimum wage bill was introduced in the Legislative Council in 2009 and is expected to be passed and enacted in 2010 or 2011. The city even has a Minimum Wage of HK$3,580 (approximately S$650) per month for its foreign domestic workers.
Most economists today agree that the negative effects of such a policy to employers as well as employees are relatively minor.
The Singapore Democrats propose a Minimum Wage of $6.80 per hour. This amount is computed based on a weekly salary of $300 which is necessary for an individual to subsist in Singapore. The amount is divided by the standard of 44 hours of work per week. This amount would be applicable to the lowest of the low-wage income earners.
Given the growing income divide in Singapore and the fact that those on the lower end of the economic ladder continue to face crushing financial burdens, the idea of Minimum Wage is becoming increasingly compelling and urgent.
Sgpolitics take on minimum wage:
The issue of whether Singaporeans should be entitled to a minimum wage has cropped up from time to time and sparked heated debates.
Some people have argued that the presence of a minimum wage may paradoxically lead to an increase in unemployment, due to the fact that the profit margins of companies employing low wage workers will be reduced, forcing them to either close down or relocate.
Allegedly, in response to larger labor costs, businesses will then try to compensate for the decrease in profit by simply raising the prices of the goods being sold, thus causing inflation and hurting consumers.
But in my opinion, such arguments fail to take into account the responsibility of a Government to provide for its citizens by making sure there is always a level playing field for all, including working class Singaporeans. Such arguments also neglect to consider the unique circumstances Singapore is in and the failed economic policies of the PAP.
Firstly, the Singapore economy has become uncompetitive over the years due to the entrenchment of GLCs which currently make up 60% of our economy, and the Government allowing costs to balloon out of control and allowing our economy to become increasingly rent-seeking. In economic parlance, rent seeking occurs when an individual, organization or firm seeks to earn income by capturing economic rent through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth. (See wikipedia.)
In particular, office rentals in Singapore are very high due to lack of market regulation and the steep rise in property prices due to large inflow of foreign funds into Singapore. High rentals pose the heaviest burden to businesses next to wages, and is in fact a more fundamental reason why the Singapore economy has become uncompetitive over the years. It is therefore in my opinion far more justified to increase the competitiveness of our economy by addressing the issue of incredulously high office rentals rather than allowing our wages to be kept artificially low by resisting a minimum wage whilst importing a large number of lowly skilled foreign workers.
High rentals are just one aspect of Singapore’s rent-seeking economy. Other significant aspects include the flourishing of middle-men like employment agents who import foreign workers into Singapore and charge high commissions to those workers, pushing them severely into debt and forcing many of them to borrow from loan sharks just for the chance to come to work in Singapore.
Secondly, instituting a minimum wage in Singapore is not likely to lead to a wage-inflation spiral due to the fact that inflation in Singapore is influenced more by import prices rather than domestic demand.
The wage gap in Singapore has grown very wide over the years. In my opinion, it is truly a lack of social justice for the Government to allow corporations to pay their workers less than would be needed for their families to live a humble but decent life, and yet pay their top executives fat bonuses year in and year out. If corporations refuse to pay their workers a decent living wage, I feel they should also force their top executives to forgo their bonuses.
It must be remembered that the absence of a minimum wage leads to exploitation of not just local workers, but foreign workers as well.
The institution of a minimum wage in Singapore would not necessarily lead to businesses relocating their operations, because countries like China, India, Vietnam and Thailand have much lower cost structures even without us having a minimum wage. If businesses wished to relocate due to cost factors, they would have done so already, with or without minimum wages for employees.
Ultimately, I believe the question should boil down to the kind of society that we are trying to create and the kinds of businesses and models of free enterprise that we should encourage in Singapore. If a business or a corporation has to close shop simply because it is compelled to pay a minimum wage to its workers, perhaps we should ask if this is the kind of business or enterprise that we would like to see flourishing in Singapore. Shouldn’t we be compelling private enterprise to move up the value chain and reduce their dependence on cheap labour?
The Government believes that it is more practical to assist low income workers through tax relief or direct cash subsidies instead of instituting a minimum wage. However, these measures have thus far been quite ad hoc, and it is not clear whether low income families have been sufficiently helped by the Government in this regard.
Much more needs to be done to help our working class citizens secure jobs and lead a decent life, beginning with eliminating GST for essential items like food and giving them a head start in the job hunt against foreigners who neither have to serve National Service nor support their families in high-cost Singapore. In my view, a minimum wage would also go a long way toward helping them and would not be detrimental to our economy.
The Government has pursued a “growth at all cost” model of economic management that relies on the heavy import of foreign labour to depress wages at the lower end of the wage spectrum. This model of economic management is clearly unsustainable given the limits of population growth. It has benefitted GLCs and multi-national corporations whilst pushing working class citizens into economic hardship and despair. Until such policies change, the vaunted social cohesion that the Government keeps talking about will never be fully realized.
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bullshit. If minimum wages is undesirable, why are there so many countries implementing that? your undesirableness slaughtered the hope of singaporean in having a revival in such gloomy economy. that's it! ten years later you won't see me in sg, and I won't see you in sg. knn... we are talking about MINIMUM wages, not AVERAGE wages... how can it cut employment. Don't tell me sg will sink to a new low where managers earn 2k. undesirable..pui pui
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Should have minimum wage, in my opinion. =)
SGD$5 per hour for any job would be cool.
Currently some jobs go for like SGD$4 per hour, seriously speaking, you cant even buy a plate of chicken rice at the food court!
Other than that, I would say leave it to market forces. -
maybe if there implementation of minimum wages $5, there will be no more fast food restaurant..
$5 for ANY job... =.="' all accounts assistant can fly kite
how....low....can.....sg.....get..... we....are....already....like....3rd...world....salary....in....1st...world....contry.....
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Originally posted by Moka:
maybe if there implementation of minimum wages $5, there will be no more fast food restaurant..
$5 for ANY job... =.="' all accounts assistant can fly kite
Leave it to market forces mah, like I said.
I feel those working at fastfood restaurants have been manipulated too much. Seriously speaking, those aunties and students working at Mac and KFC.... I wonder what they are working for. -
alot of places don't allow people below 16 to work...
"There was a time when student think 100 dollar per month... is alot.....
There was a time when three fifty per hour was still okay... and they worked...
ten years later, everything is the same. everything is the same, except the wages of PAP.
This is my coutry, this is my..... we are sinkapore, sinkaporeans."
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May 1, 2010
1. Lee Hsien Loong, Prime Minister, Singapore
Annual salary: $2.75 million
The highest-paid politician by a staggering margin, Lee Hsien Loong has often defended his extravagant salary. In a recent U.S. trip, Loong highlighted how American politicians, because of their low annual salaries, may have other interests — future pursuits, perhaps — that could distract them from their public service. "Our attitude is: you must pay for the quality of the person you want," he said of his high earnings. "You want the best person and you want him to be properly motivated." Still, rhetoric aside, there are many who justly suggest Loong's annual income is far too high for governing Singapore, a tiny nation of less than five million people. The P.M.'s salary of $2.75 million per year is more than 80 times that of the average Singaporean family.
http://money.ca.msn.com/savings-debt/gallery/gallery.aspx?cp-documentid=24079420&page=10
March 4, 2010
Political salaries revealed: Are we paying too much?
Prime Minister Stephen Harper announced in his recent throne speech that the government will table legislation to freeze the pay of the prime minister, cabinet ministers, MPs and senators. What will this actually mean in dollar terms? Probably not much. According to the Canadian Press, the 1.5 per cent wage increase that the 308 MPs and 105 senators received last year amounted to a total burden on governemnt of about $1 million. A one-year wage freeze is not likely to put much of a dent in the deficit or the pockets of our representatives, especially considering how much federal salaries have increased in the past 10 years. Here's a look at the basics of federal salaries, and a comparison to what they were in 2000 (calculations do not include non-taxable expense allowances, pensions or travel allowances).
http://money.ca.msn.com/savings-debt/gallery/gallery.aspx?cp-documentid=23577097
7. Stephen Harper, Prime Minister, Canada
Annual salary: $309,800
Canadians are world class when it comes to grieving about taxes. And who could blame us? Last year, according to the Fraser Institute, the average Canadian family lost 42 per cent of their household income to taxes. Because of this, the ire of the Canuck taxpayer always falls on figures with public salaries, and no such official earns more in Canada than Harper. Wherever you stand on the P.M.'s annual salary — is it too much, or too little? — the Conservative leader earns a wide margin more than the average Canadian. As of the last census, full-time Canadian workers made an average of only $41,401 each year.
http://money.ca.msn.com/savings-debt/gallery/gallery.aspx?cp-documentid=24079420&page=4
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When you lost millions please take money from your own property and pockets and fill back the loses. Its the country's money you managing not your family's.
If the cost of a single person on the very basics food neccessity is sgd$600/- per month say for example, i am only asking for this minimum wage for the lowest of job categories. But no i am against minimum wage. Minimum wage tag for any job position in specific. For cleaner, say its at least sgd$700. for managers say its at least sgd$4000 and higher for example. This is the minimum wage structure for any job posts in question.
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if u get retrenched.....the savings isnt even enough FOR A salary OF $3k/mth even!!!
minimum pay $600 etc is too low!!!!they want developed cpuntry status???they should put in developed minumum salary of $20/hr etc etc.dont give 3rd world country minimum salary for hong kong,china ,india etc etc.
it should be minimum $3000/mth for technical side for diploma and degree holders!!!!IS THAT ASKING TOO MUCH???EVEN CLEANERS ARE PAID $3900/MTH IN AUSTRALIA AND TECHNICANS ARE PAID $60,000/MTH.
u think i so easy life...sit down ,shake leg and talk nonsense like leekuan yew and friends???
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May 2, 2010
special report: jobless updateImportance of saving hits home
The economy is looking up, but how has life been for Singaporeans who were retrenched during the downturn last year? In February last year, in the midst of the recession following the worldwide financial meltdown, The Sunday Times launched a Need A Job column. We featured 42 people who were looking for full-time employment over the course of 21 weeks. One year on, we revisit three of them to see how they are faring. Jamie Ee Wen Wei reports.
Laid off in 2008, Ms Ophelia Lim now works as a merchandiser for a shoe chain. She lost $20,000 in a business venture with a friend.
http://www.straitstimes.com/News/Home/Story/STIStory_521669.html
It has been a rocky time for Ms Ophelia Lim. She got a job, then was told to go on no-pay leave. So she went into business with a friend, but lost $20,000 when that venture failed. Then, she got ano- ther job but quit after three weeks.
In late 2008, she was laid off from her job as a fashion merchandiser when her company shrank its operations. She had been there for three years and was earning about $3,000 a month.
When she was featured in The Sunday Times in February last year, she had been jobless for three months. Within a month, she was hired as a merchandiser by a fashion house. The job sounded promising. She would help the company develop its business at its factory in China while based in Singapore, and could try her hand at fashion design. Her pay was about $2,500.
But barely one month into the job, her employer told her to go on no-pay leave for six months. She took it as a cue to leave.
'I think it ran into some financial problems but I didn't call them to ask. There was no point because I had been working for only a few weeks,' said Ms Lim, 38.
Then came her lowest point - in September last year. She went into business with a friend and lost $20,000. They had set up a shop selling potato salad and sushi in Bishan. But within three months, the business folded when her partner pulled out suddenly.
'I was having so many sleepless nights. I didn't have a job at that time and all the money was just going down the drain.'
She resumed her job search, but did not hear from most of the companies she sent her resume to.
In February this year, she was hired by a firm to sell electronic components. But she quit after three weeks as 'it was too manly and too technical for me. I couldn't see myself doing it for long'.
The financial instability meant that her family had to cut back on extras. The divorcee lives with her three sons - aged 16, 11 and 10 - and her mother in a four-room flat in Toh Guan.
They cooked and stayed home during weekends. They also had to forgo celebrating special occasions like birthdays. 'There's no extra to buy presents, just a cake,' she said.
But things are looking up. Last month, she found a job as a merchandiser at shoe chain Chocolate Schu Bar through a newspaper advertisement.
She has taken a 20 per cent pay cut from her original fashion merchandising job, but she is not complaining. She says she is in a better state than many of her former colleagues in the fashion merchandising business, who are still jobless or taking low salaries.
'I'm lucky because the difference is just a few hundred dollars,' she said of her salary now.
Having survived the recession, Ms Lim, who has A-level qualifications, said the biggest lesson she has learnt is the importance of saving for a rainy day.
'It really hit me hard,' she said. 'My savings ran out within a few months. So now, even though I'm earning less, I make sure I save at least $50 a month.'
May 2, 2010
special report: jobless updateStaying positive in tough times
Do not let anxiety get to you, says Mr Thomas Tay. He found a job after 11 months, through a friend's recommendation. -- ST PHOTOS: KEVIN LIM
http://www.straitstimes.com/News/Home/Story/STIStory_521667.html
He had worked in a telecommunications company for more than 20 years and was a senior manager.
When his firm went through restructuring in late 2008, Mr Thomas Tay found himself jobless for the first time in his life.
The first two months were tough. 'I felt very restless. When I woke up in the morning, my body would still be getting ready to go to work,' said the 48-year-old.
Mr Tay, who has a master's degree in business (strategic marketing) from Curtin University of Technology in Australia, had hoped to find a job as a sales learning and development manager or project manager. But response to his resume was weak.
Still, he saw the bright side of things. For one thing, he found time to pick up hobbies like cycling and reading, and could spend more time with his family. 'After working for so many years, you find that, hey, a break is not that bad.'
It helped that his company had given him a fair remuneration package and he had savings.
He also made some changes to his lifestyle. 'We ate out less. We didn't go for our year-end holiday, but it was mainly because of my daughter's school activities.'
He is married with a 16-year-old daughter. His wife, a former teacher, is a housewife and they live in Yio Chu Kang.
In April last year, he thought he was close to securing a senior management position at a telecommunications firm. But after five rounds of interviews, he did not get the job.
'In the end, they just said the company had a change of plan; that's it, full stop.'
What kept him going was the support he received from his wife and daughter. 'They told me to just trust God for the job,' said the Christian.
In November, 11 months after he had lost his job, he was hired as a director of sales and business operations at a market research company. It came about through a friend's recommendation.
He is happy where he is now. 'It took some time to adjust to the culture... but I'm the type who likes to grow with the company. Job hopping just makes you unstable.'
He took a pay cut, but hopes his company will give him a raise in the next few months since the economy has picked up.
He has friends who were laid off and have also found jobs in recent months. But he said he is not feeling the effects of the economic recovery yet.
'Some sectors are doing very well but not all. I know of some companies which are still going through restructuring and people who lost jobs.'
If a financial crisis hits again, he will be more prepared.
In fact, friends who have lost their jobs have been going to him for advice. 'I tell them to stay positive and not to let their anxiety get to them... You will age faster,' he quipped.
'When the dust settles, you learn to accept it... You will get a job. It's just a matter of when.'
Why are Singaporeans taking a lower pay salary even when the economy is supposedly getting better.
WHY?
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Originally posted by Hitman+:
if u get retrenched.....the savings isnt even enough FOR A salary OF $3k/mth even!!!
minimum pay $600 etc is too low!!!!they want developed cpuntry status???they should put in developed minumum salary of $20/hr etc etc.dont give 3rd world country minimum salary for hong kong,china ,india etc etc.
it should be minimum $3000/mth for technical side for diploma and degree holders!!!!IS THAT ASKING TOO MUCH???EVEN CLEANERS ARE PAID $3900/MTH IN AUSTRALIA AND TECHNICANS ARE PAID $60,000/MTH.
u think i so easy life...sit down ,shake leg and talk nonsense like leekuan yew and friends???
the reason why our PM's salary is high is that it is comparable to those top overseas MNCs salary. Very ironic why our pay is not comparable to those MNCs overseas as well.
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the government is not preaching what it is preaching. take home lower salary cos of wage competition from china, india, thailand etc etc, yet they are earning at least 10 times or more the amount of money earned compared to their counterparts.
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Originally posted by Moka:
bullshit. If minimum wages is undesirable, why are there so many countries implementing that? your undesirableness slaughtered the hope of singaporean in having a revival in such gloomy economy. that's it! ten years later you won't see me in sg, and I won't see you in sg. knn... we are talking about MINIMUM wages, not AVERAGE wages... how can it cut employment. Don't tell me sg will sink to a new low where managers earn 2k. undesirable..pui pui
The emperor is always . . .. . . . right. In the near future . . . .. . without the miniumum wage . .. . . . . the grads will .. . . .. most work as low skilled workers . . . .. Blue collar jobs . . .. . .. to foreigners . . .. . .Continuous . .. . . unemployment . . . problem for sgporeans.
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Originally posted by Rooney9:
the government is not preaching what it is preaching. take home lower salary cos of wage competition from china, india, thailand etc etc, yet they are earning at least 10 times or more the amount of money earned compared to their counterparts.
...... now you still don;'t know??? . . . in spore, only the elites and PAP . . .. . earn millionsThe rest . .. . . can go struggle . .. . . . struggle . .. still get kachang putih pay . . .. and some . . . . . still not employed
That's the way . . .. the emperor lee . ... wants it ..... We are only . ... . ordinary citizens . . .. no power . . .. .
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If there is a minimum wage, all employers will not hesitate to give you the minimum wage, and just the minimum wage.It is just another clause to fulfill, and they won't hesitate.
Then another rule will have to come behind minimum wage such as annual retention bonus, and such blah blah blah, one rule after another.
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Only elites should have minimum wage.
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as i've said more than 20 years ago...................to my friends of course.........
S'pore is just a higher-class version of Indonesia...............
will the sheeps of S'pore vote out PAP ? or will the sheeps continue to cry mom and dad..............